Australian Cruise Industry’s Marketing Strategy

Abstract

When the demand for products or services increases, marketers always have the desire to give a unique selling proposition that attracts consumers and makes them loyal. Worldwide, the cruise industry is fast expanding with an estimated worth of over $36 billion. Almost everyone would wish to go for a dream cruise holiday offered in different parts of the world. The cruise industry in Australia forms the basis of the discussion following its rapid expansion and accommodation of many people from the rest of the world. Major players in the cruising industry include America and Australia, which accommodated over 43% of the target 22 million tourists by the end of the 2013 fiscal year.

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The report studies an interesting couple that has experience in other forms of accommodation tourism involving travels from one destination to another. They intend to try out cruise tourism for different reasons including psychographic and demographic factors. Buyer decisions differ depending on what the target cruising company can offer. Sometimes the company influences the consumer decision, but consumer dissatisfaction has major consequences on the placement of the company in the rivaled industry. As such, promotional and segmentation techniques remain very relevant for a company that seeks to survive in a competitive environment. The cruise industry’s expansion depends on what the consumers request in comparison to what the target companies can offer. The report will cover market segmentation techniques, promotional approaches, and retention measures employed within the Australian cruise industry to sustain its expansion.

The Australia Cruise Industry

One thing that makes travel destinations memorable is the presence of islands and fresh air. Islands are unique and provide a natural view that makes it less difficult to establish high-end resorts at affordable costs. Between 2012 and 2013, the Australian tourism industry recorded an increase in revenue of about 23% for its cruise industry (Bramwell, 2004). By 2014, the country projects an increase of about 30% in revenue. Australia offers cruising services based on demographic and psychographic factors. Youths, families, and children have cruising facilities that complement their ages, tastes, preferences, and income levels. The expansive and highly established Australian cruise market attracts people across the world as some countries seek consultation and itineraries from Australia in order to expand their cruise markets (Klein, 2005). Countries in East Asia with some of the best islands along the Pacific Ocean equally visit Australia for vacations. Besides, they seek to learn the art of establishing cruising tourism destinations.

Marketing segmentation

The ability to create a difference between the customers’ needs and wants concerns studying the psychographics of the clients. On the other hand, physical examination of clients by understanding the racial background, age, income levels, and political affiliations involves a study of demographics. Demographic and psychographic disparities make up market segmentation since it involves the translation of the consumer perceived needs into tangible consumer benefits.

Demographics

Social factors

Social factors that the Australian market oversees include age, racial backgrounds, culture, and customs among other elements. Currently, cruising tourists in Australia mostly comes from Queensland and New South Wales. Outside Australia, they come from the Middle East, Singapore, England, South Korea, and Japan among other countries with some of the best islands in the world. Race plays a significant role since some people are likely to profile Australians and racists, especially after an experience with some of them (National cultural dimensions, 2015). Apart from Scandinavian countries, Australia records one of the lowest cases of racism, making it easy for the cruising industry to accommodate people from several countries.

The age groups targeted by the cruising industry are 19 to over 70 years. From this age range, the under 40 years have the highest turnover of 25% in comparison to the least, which incorporate the over 70s at 12%. By 2020, many countries especially in Asia strive at expanding their cruising sector. Australia also projects expansion in the next two years and 2020 alike. Its main objective is to target youths that immensely contribute to the growth of the tourism sector through an annual contribution of about A$13 billion. Some of the target markets for youths including China, Japan, South Korea, the Americas, Europe, New Zealand, and Asia (Dowling, 2006).

Political affiliations

Political factors form part of demographic discussions when seeking to understand consumer demographics. Tourists have the desire to know how policies and ideologies affect security and stability. So far, no countries have issued travel advisories to the Australian government concerning terrorism or other insecurity concerns. It makes Australia one of the safest destinations to travel to across the world. Additionally, political instability affects the economy because people would not want to visit a country that constantly deals with insurgencies and other concerns. Sensitivity to the political affiliations of various visitors remains very important to the trained cruise crew that has to welcome guests properly Stone, (Robinson, 2008). Political discussions revolving around legislation and legality of staying in Australia also influence the ability to visit the country for tourism-related issues. Some countries have overly restrictive immigration policies that make it very difficult to get travel documents even for a short period, and it discourages people from visiting such places.

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Psychographics

Psychographics contribute to the demographics identified to influence consumer and market decisions. Psychographics always seek to fulfill emotional and physical appeals mostly consumer-driven. Tourists always look for aesthetic appeals that fit into their budgets. The element of taste and preference also applies in the scenario because tourists will feel uncomfortable if a destination does not fulfill the emotional appeals (Robinson, 1979). The purchasing power and the capability to enjoy a destination determine the type of service that a consumer will choose. Consumer satisfaction results in cross-selling or loyalty since a consumer cannot imagine getting similar or even better services from another service provider. In a competitive market, the catch is always to provide customized services to clients so that they can feel special. Initially, marketers never identified the significance of technology in increasing comfort levels for clients.

It was until the Hilton group of hotels and other comfort hotels in China began using free WIFI services to attract customers that the trend became popular. As such, research is very important in understanding the psychological needs of consumers before service provision (Robinson & Andersen, 2002). Some people do not go on cruises because they have money. Others go on vacation to forget certain life stresses while others seek to fulfill the dreams they had in life for a long time. Ability to fulfill their psychological needs results in the maintenance of a prolonged relationship with the client. Marketers must also review the cruising experiences of various customers through customer relationship management strategies in order to understand how to improve or maintain certain services (Keenan, 2009). They also have an opportunity to learn promotional tactics through such reviews.

Targeting Strategies

Demand is a common targeting strategy for most marketers since consumer-driven markets always remain at par with the expectations of their targets. Market targeting follows segmentation because a marketer already has a profile of the people the company needs to reach out with the products and services.

Undifferentiated

The cruise industry is in its infancy even though its growth is very fast. Australia can use the undifferentiated marketing strategy to target a market with no profiles in mind. It deals with the ability to establish a market without any form of cluster or differentiation. Currently, Australia uses the approach because it has an expansive market in almost all the continents. According to the Australian tourism industry, many countries seek Australian cruising visitors’ itineraries in order to understand the demands of the populations. Quality and political stability are some of the drivers that enable the Australian cruising companies to leave decision making to the clients.

Undifferentiated targeting strategies always empower the markets enabling them to see solutions through the services offered by the companies. Such targeting tactics largely depend on the marketing mix used to increase consumer appeal in the target market. The undifferentiated approach uses the power of information in giving consumers the power to make rational decisions concerning their travel destinations. People see cruise reviews, comments from visitors of such destinations, and other promotional approaches mostly through multimedia (Macleod, 2004). The untargeted consumer makes an individual decision to choose the cruising destination without coercion or advertisements.

Concentrated

Concentrated targeting strategies aimed at a niche market that remains loyal to a service or product provider irrespective of the competitive forces in the market. Such targeting strategies incorporate both demographic and psychographic appeals to influence consumer decisions. Price sensitive customers from the cruise industry will seek services outside the metropolises. Customers from Queensland among other affluent destinations might use the Silver Sea services or other high-end facilities depending on their income levels. According to Maslow’s hierarchy of needs, at self-actualization, people rarely concentrate on pricing, but value. Most concentrated techniques focus on price and value-driven customers because people largely focus on the two options. The Australian cruise industry is big and cannot afford to focus on concentrated markets. The targeting strategy best complements a small industry that struggles to survive and save the costs of production and distribution. Cruising in Australia is a big industry; it has to focus on expansive markets in Asia, the Americas, the Middle East, and greater Europe.

Multi-segment

In some cases, one needs to take different approaches in targeting consumers since one might fail to achieve its objective. One such as the undifferentiated might appeal to educated segmented markets because information mostly attracts them. However, the same might not apply to people with low educational levels. The less educated require the concentrated services that give dedicated attention to the identified markets. Multi-segment strategies are expensive, but they have the best results because they aim at fulfilling both emotional and demographic needs. Multi-segmentation approaches mostly incorporate technology for purposes of efficacy and effectiveness. The targeting strategy is important in the retention of dynamic populations (Dowling, 2006). In an industry that provides diverse services, it will be a waste of resources if a company fails to provide many services that meet consumer expectations. The Australian market might also find the strategy beneficial especially after topping the world list for the best cruise destination in the world.

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Positioning Strategies

Product

In a competitive market, it is important to come with a positioning strategy that diverts attention from other service providers. Australia tops globally in the tourism industry, but it only provides a challenge to work even harder as opposed to rivals. The Australian market provides a variety of services including river and coral cruising. It all depends on the budget and other demographic factors. A person chooses a good cruising destination based on the provided services and destinations. Market penetration and profit-making are very important for the cruising industry because competitors also strive to achieve the same.

The uniqueness of a product and service delivery can make it easy to choose a product from a group of several others. Australian cruising companies such as Aussie offer discounts or bargains for customers because they seek to establish long-term relationships with clients from different parts of the world. Today, the country enjoys a consumer growth rate of 20% of passengers seeking cruising services since 2013. The popularity of the cruising sector increased in the same year giving France, UK, and Germany among other countries in the eurozone a run for their money. Such, a product leaves a lasting impression on consumers and it forms the first basis of promotion (Smith, 2001).

Sales and promotion

The bargains for different destinations including value-added services comprise promotional strategies aimed at increasing consumer interest in products and services. Australia began penetrating the tourism market by increasing the appeal of its cruising industry. Generally, its tourism sector received limited attention from the rest of the world until recently. In 2012, Australia was second in the world competing against the U.S., but today the tables turned since its cruising industry contributed towards the economy by 11% between 2012 and 2013. Sales and promotion are elements of customer relationship management aimed at building long-term relationships. When Australia began with ordinary hotel tourism approaches, it realized that the demand for cruising increased. It opted to give free trials to visitors, which encouraged cross-selling, and increased demand from the same in the past two years. Today, Australia does not have to give free holidays to attract consumers and distract them from competitors. Undifferentiated consumers automatically know the destinations they seek for the cruising services in Australia.

Price

Everyone who wants to have a cruising experience can afford it in Australia. The country offers a variety of services that will contribute towards the fast-growing economy by about A$3 billion by 2020. The Australian market understands that variety is the best approach to attracting the greatest population. It makes no sense to offer concentrated targeting services to a few customers and earn a lump sum from a few clients (International Cruise Conference & Papathanassis, (2009). The diversified market in Australia has a high end, mid-range, and low-end services for various customers. The intention is to encourage cross-selling because even people with low-income levels will seek financial breakthrough to afford high-end services in the future.

Place

The place of promotion is very important, and Australia extensively engages consumers through electronic media. Millions of consumers on social networks share images of their cruising experiences, which appeals to the emotions of the target audiences. Over 700, 000 visitors showed interest in the cruising industry of Australia from 2012 and prospects are that it will double by 2015. Australia also uses tourism fairs globally to promote its industry. It incorporates the multi-segmented approach in such areas because it needs to reach out to the greatest consumer base. While the industry grows competitors from Germany, the U.S. and Ireland continue to come up with better tourism packages in order to divert consumer attention away from Australia. As such, Australia has to use technology and personal selling in reaching out to customers and building relationships (Virtuoso travel advisors: Where can we take you? 2015).

Phil and Becky’s psychographic profile

Phil

Phil has an interest in career growth and likes planning for vacations because it offers a relaxing environment away from work. After the promotion, the photographer with a good salary enjoys the fact that they still do not have children and he can travel around the world with his wife. After traveling alone, he wants an experience that makes him switch off from work. The cruise experience will also be less hectic because he enjoys the fact that they will travel to multiple destinations and only unpack once. Relaxation and the need for comfort are the main psychographic processes influencing the decision that Phil makes before cruising.

Becky

Becky fantasizes and seems to have an emotional attachment to an experience after seeing Facebook photos of a friend’s cruising experience. For her, planning for the vacation enables her to bond with Phil and plan for her last and memorable vacation without children. She also feels relaxed about a promotion and a controlled mortgage. Emotionally, her wedding, ability to start a family after the trip, and the need to make the occasion memorable remain the most important for Becky. From the Psychographic perspective, Becky seems oriented to family life and the need to have the most memorable vacation. Friends and the perceptions of other people about her life also influence the decisions she makes about her life.

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Cruise line marketing strategy for Phil and Becky

Relationship building

From previous experiences, the two display the characteristics of connected consumers. They develop attachments to places based on the experiences they get while on vacation. It ranges from customer service to nature and comments from other people. In the scenario, they have a close attachment with tourist destinations in Australia since after traveling alone and with friends for a long time, they had the best experiences. They prefer booking and accommodation services, but the source for information within Australia because they know that it will satisfy their emotional needs.

Financial background

Phil and Becky are stable, and they do not have many family obligations. Financial stability gives them the freedom to choose from a range of services offered in the country. Everyone would want to go for a cruise experience for different reasons. Income levels determine the experience one would have in the industry. An expensive experience comes along with different memorable packages (Fitz-enz, 2010). For instance, one would choose an expedition experience that offers cruises along the coral reefs and other places. The tourists use speedboats and mid-range ships or mega-ships. Other people opt for sophisticated ships such as the up-scale lines from Silversea among others. As such, an experience largely depends on the income levels of the target population. Each person can get a service from the expansive market in Australia including Caribbean cruises for weddings of celebrities. Taste and preference is another financial factor that determines the buyer decisions. While one would opt for the luxury lodges in Australia and have an experience of a lifetime, a cruise or camp depending on the tastes and preferences (Jayawardena & Nettleford, 2002).

Dealing with competitors

Becky and Phil seek to find a cruising company that will meet and exceed their expectations. Becky wants a memorable experience while Phil seeks a relaxation destination with limited packing and unpacking obligations. They have to select from a range of service providers since they have an office covering their expenses to a cruise destination. Out of the many travel destinations and options from APT, Uniworld, Viking, and Scenic Tours among several other destinations, the two will choose the most competitive service provider (Showker, 2010). They will have to compare their cultural profiles with the profiles of the target destination, which remain very important for making the occasion memorable.

Conclusion

The fast-growing cruising industry in Australia is worth the attention of people with prospects of traveling around the world. Between 2012 and 2013, the industry seems to give prospects for further expansion meaning that it will provide more services as opposed to rivals in Europe and other parts of the world. An experience of a lifetime is a wish that many people would strive to fulfill as Phil and Becky seek to do through cruising around Australia.

References

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Dowling, R. K. (2006). Cruise ship tourism. Wallingford: CABI.

Fitz-enz, J. (2010). The new HR analytics: Predicting the economic value of your company’s human capital investments. New York: AMACOM.

International Cruise Conference, & Papathanassis, A. (2009). Cruise sector growth: Managing emerging markets, human resources, processes, and systems. Wiesbaden: Gabler.

Jayawardena, C., & Nettleford, R. (2002). Tourism and hospitality education and training in the Caribbean. Kingston: Univ. of the West Indies Press.

Keenan, S. (2009). Mallorca v Majorca which is correct. Web.

Klein, R. A. (2005). Cruise ship squeeze: The new pirates of the seven seas. Gabriola Island, BC: New Society Publishers.

Macleod, D. V. L. (2004). Tourism, globalization, and cultural change: An island community perspective. Buffalo: Channel View Publications.

National cultural dimensions. (2015). Web.

Robinson P., (1979) In Heitmann, S., & Dieke, P. U. C. (2010). Research themes for tourism. Oxfordshire: CABI.

Robinson, M., & Andersen, H. C. (2002). Literature and Tourism. Australia: Thomson.

Showker, K. (2010). The Unofficial Guide to Cruises. Hoboken: John Wiley & Sons.

Smith, P., B (2001) Organisational Behaviour and National Cultures. British Journal of Management, 3, 39-51.

Stone, R. J. (2008) Human resource management. (6th ed.). John Wiley and Sons, Australia Ltd.

Virtuoso travel advisors: Where can we take you? (2015). Web.

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